Type II alveolar epithelial cells play an important role in the structure and function of pulmonary alveoli. These cells are also thought to be the progenitors of type I cells which cover much of the alveolar surface. Numerous methods have been devised to isolate and study these cells in vitro. Although the studies which have utilized these methods have markedly enriched our understanding of these cells, they are limited by the following observations: 1) Type II cells do not proliferate to any extent in vitro, thus, all studies must be performed on primary isolates of cells. This characteristic limits the number of studies that can be performed. 2) Although the rate of differentiation of type II cells to type I cells can be altered, the cells are constantly changing their differentiated state in vitro. These observations suggest that lines of type II cells which do not significantly change their differentiated state in culture would significantly improve our ability to evaluate these cells. Optimally, these cells should grow but not exhibit typical transformed (malignant) characteristics. Recently, Cone et al showed that a variety of rat epithelial cells (lung cells were not studied) could be immortalized using a retrovirus expressing the 12S adenoviral E1a gene product (Mol Cell Biol 8:1036, 1988). The cells grew in culture but did not exhibit transformed (malignant) characteristics. These observations led to the following overall hypotheses which underlie the proposed studies: 1)Lines of rat alveolar epithelial cells can be generated using a retrovirus expressing the 12S adenoviral E1a gene product, as described by Cone et al (12). These cells will maintain a relatively stable differentiated state i culture. 2)Clones of rat alveolar epithelial cells at different stages of their differentiation can be isolated. 3)The differentiated state of the different clones of cells can be altered in culture by exposure to agents known to affect the differentiated state of epithelial cells. To evaluate these hypotheses, we will ask the following specific questions: 1) Can lines of rat alveolar epithelial cells be generated using the retrovirus expressing the 12S adenoviral E1a gene product that was described by Cone et al? 2) Do these cells exhibit relatively normal (nonmalignant) characteristics? 3) Can clones of alveolar epithelial cells at different stages of their differentiation be isolated and maintained in culture? 4) Do the lamellar bodies in the type II cell lines have a lipid composition similar to that of freshly isolated cells? 5) Do the lines of type II cells produce the surfactant apoproteins, SP-A, SP-B, SP-C? 6) Do clones which contain lamellar bodies release surfactant in response to stimulation with beta agonists? 7) Can the differentiated state of the different clones of alveolar epithelial cells be altered by agents that are known to affect the differentiation of other epithelial cells? These studies, and the cell lines, should markedly enhance our understanding of the structure and function of alveolar epithelial cells in the lung.